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By Dugie Standeford for Intellectual Property Watch

An independent study of Britain’s intellectual property framework has found it essentially sound but in need of changes at the national and international levels. Many of its 54 recommendations appear uncontroversial, but several copyright proposals are already sparking debate, and the report could have European-wide or even worldwide impact.

The review by Lehman Brothers Communications Chief Andrew Gowers, a former Financial Times editor, was commissioned by Chancellor of the Exchequer Gordon Brown in 2005 and published on 6 December.

High profile UK reports on IP rights sometimes have a way of provoking change in international policies, such as was the case in the public health area. The review examined how the government awards intellectual property rights, how business-friendly the patent and copyright schemes are, whether current IP infringement rules and technologies reflect the digital environment, and whether existing exceptions to copyright are reasonable.

European Commission Action Sought

The European Commission is considering whether to extend the term of copyright protection for sound recordings and performers’ rights from 50 to 95 years, and to apply the longer term to existing as well as future content. The review urged the Commission to reject the idea, saying reasons offered for the change, including alignment of Europe’s term with that of the United States, are not persuasive enough to justify it.

That brought howls from the music sector. The International Federation for the Phonographic Industry accused Gowers of missing a “golden opportunity” to steer the UK government to “promote one of its most successful industries.” The Association of Independent Music (AIM) said parity between US and UK writers and composers “is only just, fair and reasonable.”

The Open Rights Group, however, praised Gowers for standing up to “music industry hyperbole.” National Consumer Council Policy Director Jill Johnstone said, “Evidence shows that music companies generally make returns on material in a matter of years – not decades.” She added, “Current terms of protection for copyrights already over-protect right holders – and consumers are paying the price.”

Several recommendations aimed to recalibrate the balance between consumers and rights-holders through various “fair use” exceptions to copyright. One urged the government to seek an amendment to the 2001 EU Copyright Directive to add an “orphan works” provision making it easier for artists to re-use copyrighted material whose authors cannot be found.

The proposal is predicated on the premise that either the creator of a particular work is unknown or there are problems with clearing the rights to it, said London IP attorney Laurence Kaye. But as more and more content is digitalised, creators will have readier access to tools enabling works to be easily identified via metadata. Legislating now will remove the incentive for artists to use those tools, he said.

National Law Updates Needed

The report called for creation of a private copying exception. The proposal that consumers be allowed to copy content in order to shift it across different formats prompted AIM to warn that such a right, without an accompanying levy on physical media such as CDs and DVDs, “may well be opening the floodgates to uncontrolled and unstoppable” private copying.

Kaye argued that creating US-style “fair use” rights is “very risky” because it could lead to a new set of exceptions atop those already granted by existing UK case law. But Johnstone said, “Plans to allow people to copy CDs for personal use from 2008 – which is illegal at the moment – is a welcome recognition of the need to improve consumers’ rights.”

The review also recommended aligning online and offline infringement penalties. And, noting that the ongoing barrage of lawsuits has not “led to a significant reduction in peer-to-peer users,” it urged Internet service providers and content owners to agree on best practices for sharing necessary information about suspected infringers without violating their privacy rights. If such an accord is impossible, the government should consider mandating protocols, Gowers said.

No Extension of Patent Rights

Among its many recommendations for streamlining patent procedures and improving the workings of the UK Patent Office, the review urged the government to “maintain the policy of not extending patent rights beyond their present limits within the areas of software, business methods and genes.” Changes to that position should only be made if economic evidence demonstrates they “would enhance innovation to offset the considerable costs,” the review said.

“Much has been said on the subject of software and business method patents, and there are good arguments for softening the law in this area and good arguments for tightening it,” said Venner Shipley LLP Partner Paul Derry. It is “not surprising that Gowers has suggested maintaining the status quo, even if most interested parties would like to see the law change,” he said.

The report also recommended that the government encourage the European Patent Office to pursue work-sharing with the US Patent and Trademark Office and the Japanese Patent Office. But Derry said the proposal would “reduce examination quality,” increasing the number of granted patents that are not “fully valid.” Relying on the work of other patent offices would cut costs to some extent, he said, but the savings would be much less than the additional costs of dealing with more faulty patents. Smaller companies would likely be harder hit, he added, giving larger firms an advantage.

In addition, the review urged the UK Patent Office to work with African countries on intellectual property issues and the government to encourage the international community to review the status of least-developed countries implementation of the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) before 2016 to see if their compliance dates should be extended.

The chancellor endorsed the full Gowers anti-piracy package and “noted” the recommendation to the Commission on copyright term.

Next Steps

The next steps are to focus on the detailed proposals and the overall framework, according to John Howkins, who headed the Royal Society of the Arts Adelphi Charter and is deputy chairman of the British Screen Advisory Council. Howkins was among those consulted in preparation of the report, and several of his recommendations are reflected, such as forming an Intellectual Property Office (though he said it is not as strong as he recommended).

The upcoming debate also will focus on governance, and the “remit, constitution, obligations and required resources” of the new office, he said. In addition, Howkins added, the focus will be on “ending the ‘IP Exception’ which allows IP policy-making processes that are no longer acceptable in other areas of government regulation.”

Dugie Standeford may be reached at info@ip-watch.ch. William New contributed to this report.